CONTRACTOR’S OBLIGATION TO MITIGATE DAMAGES

Ovidiu Ioan Dumitru () and Andrada Laura Tarmigan ()
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Ovidiu Ioan Dumitru: Dean, Faculty of Law, Bucharest University of Economic Studies, Romania
Andrada Laura Tarmigan: Bucharest Bar Association, Bucharest University of Economic Studies, Romania

Perspectives of Law and Public Administration, 2020, vol. 9, issue Special Issue, 76-82

Abstract: The duty to mitigate damages is recognized as a general principle of law in most jurisdictions and moreover, as a principle of international law. Therefore, it can be applied by courts in contract claims cases, even when it is not expressly stated by the contract. The main criteria is to determine if the party adopted reasonable measures in order to either minimize its loss or to avoid increasing the other part’s loss. The importance of this principle should not be neglected in Construction Contracts, where the Contractor is generally considered as the one obliged to take reasonable steps to reduce costs in the case of an extension of time. Even if the contract breach is attributable to the other party, the courts must consider the Contractor's behavior regarding measures meant to limit the amount damage and the overall negative effects on the economy of the contract. This paper aims to emphasize some aspects regarding the contractual behavior of both Employer and Contractor, when faced with an obligation to mitigate damages in the context of contractual delays, being a useful tool for practitioners for preventing negative financial consequences.

Keywords: construction contracts; contractual damages; critical path; extension of time; intermediate deadline. (search for similar items in EconPapers)
JEL-codes: K12 K15 (search for similar items in EconPapers)
Date: 2020
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